Rolls-Royce not impacted by Brexit as trading holds steady

Rolls-Royce expects to meet full-year goals but could suffer from pound devaluation

Engine manufacturer Rolls-Royce said today (28 June) that its day-to-day business will not immediately be impacted by Britain's decision to leave the European Union.

In a trading statement, the FTSE 100-listed group added the medium and long-term implications of leaving the bloc would depend on whether Britain can agree a post-Brexit trade deal with its European neighbours.

Rolls-Royce said it remains committed to the UK "where we are headquartered, directly employ over 23,000 talented and committed workers and where we carry out a significant majority of our research and development".

The group, which last month threw its weight behind the Remain campaign, also indicated trading in the first five months of the year has been largely in line with expectations and that expectations for the whole of 2016 remain unchanged.

"As outlined in May, underlying profit before financing charges and tax for the first six months of the year is expected to be close to break-even, with our performance significantly weighted towards the second half," Rolls-Royce said.

"This reflects the previously identified headwinds expected in 2016 and the resulting lower level of overall performance compared to the prior year."

The London-listed group added it expects to deliver more engines in the second half of the year with solid underlying growth in revenues, adding it forecast to reap the benefits of its ongoing restructuring programme.

Should rates for the full year remain at the average levels seen in the first five months of 2016 – with the pound worth $1.44 and €1.29 respectively – the movement would improve underlying revenues by around £400m ($531.3m, €480.7m) and improve underlying profit before tax by around £40m, the company said.

However, following Britain's vote to leave the EU, the pound fell to a 30-year low against the dollar and was trading at $1.329 and €1.201 early this morning.